German Confidence Rise Amid Skepticism

By IBT Staff Reporter On 03/25/11 AT 5:22 AM

Germany continues to be the growth driving paddle in the euro area and helping the nation offset the downside pressures of the debt crisis amid tight budgets and austerity measures to ensure the area's return to steady growth and solid fiscal position.

March's IFO Confidence survey showed the mixed sentiment amid German businesses and the cautious state of mind amid the ongoing instability in the area and in the world, which might affect the outlook for the German recovery.

The Business Climate Indicator was marginally changed from the previous at 111.1 from 111.2 and beat the expected drop to 110.5. The Current Assessment was the strongest rising to 115.8 from 114.7 and better than the expected 114.6.

Meanwhile, the drop in the Expectation index was the signal for the prevailing skepticism and fear amid the prevailing uncertainty. Germany suffers the debt crisis in the area, the instability in the Middle East, the Japanese crisis, inflation, and ECB tightening which all are weighing negatively on the outlook. The index dropped to 106.5 from 107.9 and also missed expectations for 106.8.

The figures are the alarm for us to keep the market under our focus and business in the second quarter that suffered strong hits to lots of markets and might have affected demand and production which in role will weigh on equities with sluggish earnings and weigh negatively on the economy with lower consumption, production, spending and hiring capacity.